Consider bankruptcy to get out from under medical debt

Medical expenses are a leading cause of bankruptcy.

Even though more Americans have medical coverage than ever before, we are still collectively plagued by medical debt. A study from the Consumer Financial Protection Bureau shows that more than half of Americans — 59 percent — report medical debt collection actions in the last year.

Not only is medical debt still a huge issue for individual families, these debt collectors have a reputation for being particularly nasty. Debt collection agencies seeking medical debts exhibit a high level of harassing phone calls, threatening letters and illegal or borderline illegal behavior.

Unlike some other types of consumer debts, medical expenses are a unifying factor that crosses age, cultural and socioeconomic demographics. The reason for this is relatively simple: no matter what, regardless of our economic station or anything else, we are still susceptible to illness or injury. We might not all incur debt for an expensive car or a high-price condo, but our health is still, in some ways, a proverbial "crapshoot."

Why are medical expenses still so pervasive?

With record high health insurance rates, it seems like medical debt shouldn't be so pervasive. Instead, we continue to collectively struggle. This is due to many different factors, including:

Higher cost of vital medications - emergency allergy medications like the EpiPen®, and many brands of insulin have all seen triple-digit price increases in the past decade

An aging population - the older we get, the more susceptible we are to health woes

High deductibles - the Kaiser Family Foundation (KFF) reports a 255 percent increase in average deductibles between 2006 and 2015

Low federal minimum wage; it has been stuck at $7.25 an hour since 2009

Costs trickling down from employers and insurers to the insureds - a KFF study showed out-of-pocket expenses have risen 83 percent since 2000

Are you facing creditor harassment? Here's how to make it stop.

It may be possible to stop medical debt collection. Are you in a position to offer a lump sum payment? Many debt collectors will accept a much lower amount if it's given in a lump sum payment. It may involve borrowing funds from a family member, friend or lender, but that will make the letters, phone calls and harassment stop.

Of course, another option for climbing out from under a mountain of medical debt is to file for bankruptcy. Both Chapter 7 and Chapter 13 filings will help rid you of outstanding medical expenses, though they approach the discharge differently. Chapter 7 will offer a quick discharge, while Chapter 13 offers a set payment plan for an established time, at the end of which remaining debt is wiped out.

No matter which avenue you choose, if you are facing seemingly insurmountable debt, consult an experienced bankruptcy attorney. Call attorney Matthew Gandert at Affordable Law, PC, to learn more about debt relief options. His Albuquerque law office is available online or at 505-633-8723.

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